Taxes, Registration, and Fees: The Extra Costs of Buying a Car

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - November 9, 2018

When you buy a vehicle, you need to remember to budget for the total out-the-door car costs that include state and local sales tax, license and title fees, and documentation fees. Depending on the state you live in, it can cost hundreds of dollars to pay these taxes and fees. In some cases, you could find yourself unable to get financing if you aren’t prepared to pay these out-the-door costs.

How Much are Tax, Title, and License Fees?

Putting an exact number on tax, title, and license (TTL) fees isn’t so simple. It depends on where you live, and how your state computes these out-the-door costs. Some states base registration and title fees on the weight or age of the vehicle, while some have a flat rate. For example, in Florida, they place an emphasis on the weight of the car to determine TTL fees and require these fees to be paid annually. Their base registration fee in 2017 was $225 for an initial registration, plus an additional charge ranging from $14.50 to $32.50 based on the size of the vehicle.

In states that have a flat rate, such as Wisconsin, their TTL fees aren’t as hefty. In 2017, Wisconsin’s base registration fee was $75 and required owners to pay annually. But, Wisconsin charges a wheel tax for cars 8,000 pounds or less, and requires an additional $100 fee for electric vehicles and $75 for hybrids in order to cover the decreases in gas tax these cars have to pay. At the same time, states such as Oregon are adjusting to the electric vehicle wave by planning on adding on more fees by 2020.

Can I Finance Taxes and Fees?

Do you have to pay for these fees separately, or can you include tax, title, and license fees with your auto loan? It depends on where you finance the car. If you finance through a dealership, taxes and fees are typically included in your monthly payment. Because these fees are rolled into the financing deal, your monthly payment is going to increase a bit, so make sure you budget accordingly. You can also pay these fees upfront, and in most cases, it's a good idea to do so.

You can also finance taxes and fees if you buy a vehicle from a private party, if the lender you’re working with allows it. In this instance, the lender has to issue you two checks – one to the seller and one to the state.

The Bottom Line

It’s important you budget for TTL fees before you head to a dealer. The TTL fees could mean the difference in being able to finance a specific car or not. Discuss this with the lender, and don’t be afraid to ask questions.

If you’re looking for a dealership that can help you get a vehicle, but worry you aren’t going to get approved for financing, let CarsDirect help. We work to connect car buyers to a local dealer who has the lending resources to handle various credit situations. To get the process started, simply complete our auto loan request form. It's free of cost and obligation.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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